Chapter 18 - The Goods market in an Open Economy Flashcards

1
Q

J-curve

A

the adjustment process in the trade balance in response to a real depreciation

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2
Q

an increase in investment must be reflected

A

either in an increase in private saving or public saving or in a deterioration of the the current account balance

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3
Q

a deterioration in the government budget balance must be reflected

A

in an increase in either private saving, or in a decrease in investment, or else in a deterioration of the current account balance

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4
Q

a country with a high saving rate must have

A

either a high investment rate or a large current account surplus

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